GMA refocuses from crime back to economy

She thinks her campaign against criminality has achieved results, so President Arroyo believes it’s time to refocus her attention on the economy.

But she isn’t giving up her photo sessions with crime suspects just yet.

Speaking mostly before farmers in San Isidro, Nueva Ecija during the celebration of the "First Cry of Nueva Ecija," the President said she would pay more attention to the economy and strive to solve the problems of her penniless compatriots.

Mrs. Arroyo said she would reorient the government’s economic policies from a dependence on exports and increase its reliance on domestic consumption — the economic formula that she said was being successfully implemented in Thailand.

"Now that the peace and order problem is being settled, I will go back to the economy," the President said, citing Phi-lippine National Police (PNP) chief Director General Hermogenes Ebdane Jr. for his string of successes on the peace and order front.

But less than two hours after outlining the broad strokes of her new economic focus, the President motored from Nueva Ecija to the Western Police District in Manila for another photo opportunity with policemen who arrested the suspect in the Aug. 9 killing of former Manila councilor Chika Go.

The President lauded the PNP’s recent strides in the go-vernment’s anti-criminality drive and appeared reluctant to give up the time she spends parading suspected criminals in public.

"Of course, if General Ebdane invites me to photo ops with the police, I will still go," the President said. "But my focus now would be back to the economy."

She explained that although the economy continued to grow, it was not expanding dramatically because of the sluggish economic recovery in the US, the country’s largest trading partner.

In Nueva Ecija, Mrs. Arroyo said this was precisely the reason why she wants to tighten economic management.

"In simple words, we would rely less and shift from export reliance because the US recovery is not yet complete. We cannot rely on her," the President said.

Aside from the slow recovery of the US economy, the President noted how Thailand, an old rival for foreign investments and export markets, appears to be making strides in its economic recovery efforts.

She said Thailand, one of the countries severely affected by the 1997 Asian financial crisis, is successfully turning its economy under the leadership of Thai Prime Minister Thaksin Shinawatra.

She said Thaksin’s "consumption-based, managed-assets reflation" formula was similar to the economic policy she started to pursue last year but Thaksin was able to sustain the momentum and is now reaping the fruits of his persistence.

"What we did last year was done with greater intensity by Thailand and they saw it effective and (it is still effective) up to now," the President said.

"Thaksin did this more than we did in the Philippines," she said. "They said he cannot do it but he was able to show within one year how Thailand’s economy recovered. So if we act now and focus our attention, we could also do it here."

Hiking local demand is key

To do so, the President said the government would refocus its priority from export dependence to an increased focus on domestic demand.

"Asia is relying on its own and we need to do this," she stressed even as she admitted that, unlike Thaksin, she has been sidetracked by the fight against criminality.

"Instead of export orientation, we would go to new improvements in domestic demand," she said, stressing that it would be the key to the country’s economic recovery.

"That is where we would give attention in the next few days because (it) would be the key to our economic recovery," she added.

She said one of the ways to encourage domestic consumption was through re-channeling capital resources in the financial system to small and medium enterprises (SMEs), which she described as "the most efficient use of capital."

The President said she would discourage banks to extend loans to less productive sectors of the economy, like high-end real estate and factories with excess capacity, and encourage instead the funneling of funds to small businesses.

"Loans should not go to (big business)," she said. "Loans should go to SMEs because they are the best users of capital."